Production Begins at Central Azeri in the Caspian Sea

Gunashli-Chirag-Azeri Fields, Azerbaijan
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The Azerbaijan International Operating Company (AIOC), operated by BP, has started oil production from the Central Azeri development, part of the Azeri-Chirag-Gunashli (ACG) field, in the Azerbaijan sector of the Caspian Sea.

The parties to the Azeri-Chirag-Gunashli (ACG) Production Sharing Agreement are: BP (operator - 34.1%), Unocal (10.3%), SOCAR (10%), INPEX (10.,0%), Statoil (8,6%), ExxonMobil (8%), TPAO (6.8%), Devon (5.6%), Itochu (3.9%), Amerada Hess (2.7%).

Located in approximately 128 meters of water 100km east of Baku, Central Azeri (CA) production began from the first of ten pre-drilled production wells on Sunday, the 13th of February. Production will increase through 2005 as the other pre-drilled wells are brought online, prior to further platform drilling over the coming years. Total production from Central Azeri is forecast to be some 35 million barrels in 2005 (equivalent to an average of 93 000 barrels of oil a day).

"The start up of Azeri is an exciting moment both for Azerbaijan and BP as operator of the ACG Project," said David Woodward, BP's Associate President in Azerbaijan. "It signals the beginning of oil production from the ACG Full Field Development, and the culmination of many years of planning, construction and operations delivery."

"A team of more than ten thousand people, spanning many countries has been working on this project over the past three and a half years. I would like to congratulate the government, our partners, employees, all the contractors and suppliers and every person involved in this achievement."

The Central Azeri facilities comprise a 48-slot production, drilling and quarters (PDQ) platform, a 30" oil pipeline and a 28" gas pipeline from CA to the Sangachal Terminal, expansion of the existing onshore terminal at Sangachal. The development is designed to process 420,000 barrels of oil a day.

In addition to the PDQ, a compression and water injection platform (C&WP) will be installed in Central Azeri in the third quarter this year and bridge-linked to the PDQ to create a major offshore complex encompassing accommodation, drilling, production, processing, compression and re-injection facilities.

Oil from Central Azeri will be transported via a new 30" subsea pipeline to the onshore Sangachal Terminal, which has been expanded to receive the additional oil volumes from the ACG field including three newly-built crude storage tanks. Processed oil from Sangachal will initially be transported to market via existing export routes, and through new export routes once the Baku-Tbilisi-Ceyhan (BTC) pipeline is operational later this year.

Gas produced from Central Azeri, beyond that used for reservoir pressure maintenance and fuel, will be exported via the new 28" subsea pipeline into the Sangachal Terminal gas processing facilities. From there the gas will be transported, via a newly built gas export pipeline into the Azerigas system for domestic use.

The ACG Production Sharing Agreement (PSA), signed in September 1994, covers the 30 year development of the Azeri-Chirag-Gunashli contract area. It is estimated that 5.4 billion barrels of oil will be recovered during the PSA period. The field is being developed in several phases: Chirag has been producing since 1997 as part of the Early Oil Project (EOP). This has now been followed by Azeri Project Phase 1 - Central Azeri production. Successive phases include West Azeri and East Azeri as Azeri Project Phase 2, scheduled to come on stream in 2006 and 2007 respectively, with ACG Phase 3 - Deepwater Gunashli, now sanctioned and expected to begin production in 2008.

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